Financial Planner

Category - Professional Conduct and Regulation

What type of financial institution primary function is to trade stocks?
  1. Credit Unions
  2. Brokerage Companies
  3. Insurance Companies
  4. Trust Companies
Explanation
Answer: B - Brokerage companies are financial institution whose primary function is to trade stocks. The distinction between brokerage firms and banks has become blurred; however, the Glass-Steagall Act of 1933 forbids banks from underwriting corporate securities. Brokerage firms are insured by the Securities Investor Protection Corporation up to $500,000.
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